Automotive News - April 14, 2008 - (Page 16)

16 • APRIL 14, 2008 ADVERTISING STAFF Ex-Porsche CEO: Cayenne spiced up sales Peter Schwarzenbauer left as CEO of Porsche Cars North America Inc. on April 1 — exactly five years after he took the post. On Tuesday, April 8, he became the board member for sales and marketing at Audi AG in Germany. Schwarzenbauer arrived in the United States to launch Porsche’s first SUV, the Cayenne, which drew harsh criticism from some Porsche traditionalists who wanted the company to sell only sports cars. He says the Cayenne has helped boost Porsche sales significantly and has stabilized dealer business. Schwarzenbauer says his most important accomplishment was building a better relationship between Porsche and its dealers. Dealer profits have grown significantly, as has dealer investment in facilities. Schwarzenbauer spoke with Staff Reporter Diana T. Kurylko. What has been the most significant factor in Porsche’s U.S. sales increasing from 21,318 units in 2002, when you started, to 34,693 vehicles last year? The biggest factor was that we started to build up a strong and trustful questionanswer Peter Schwarzenbauer: Since the launch of the Cayenne, Porsche has “attracted a lot of new people to the brand.” relationship with our dealer body. I and everyone on the team invested a lot of time and energy into becoming a very predictable, open-minded business partner and not the guys sitting here in Atlanta telling the dealers what to do. It is the foundation of what drives the company. We were right behind Toyota and Lexus on the NADA dealer survey. The other part is that the Cayenne was more successful than we originally planned. Cayenne sales have dropped from a high of 18,117 in 2004 to 12,547 last year. What happened — a natural decline or an unexpected drop? It is more of a natural drop. If you look at the SUV segment in general, you can see a 15 to 20 percent effect — whatever is new sells at this higher level and then enters a normal life cycle. We were not awfully surprised about this with the Cayenne. We have watched this happen with other brands and cars in this segment. You came to North America just as the Cayenne was being introduced. Were people wrong when they said the Cayenne wasn’t a Porsche and would fail? Definitely yes. People were saying, “We don’t know the effect Cayenne will have on the other models.” Since we launched the Cayenne in 2003, we increased 911 sales by 32 percent and attracted a lot of new people to the brand. A lot of people now have a sports car in their garage because of the Cayenne. Why has the Boxster lost popularity? Can Porsche hope to bring it back up to the nearly 10,000 units a year in the United States, or was that a unique period? In my eyes, the 10,000 sales were unique and reached in the unique environment of the dot-com era, when everyone thought they were dot-com millionaires. Boxster sales are now back to normal levels. Are last year’s sales of 12,493 911s the maximum Porsche can sell in this market? There is still room to grow. If you look at the general development in this country, we will have more and more households with income over $200,000 and more people coming into the situation where they can afford the 911. What did the Cayman do for Porsche in the United States? We saw this roadster segment decline for three or four years. We wanted to counteract that with a different type of Boxster, and the Cayman (coupe) stabilized our midengine segment sales quickly. you sell in the United States next year? Is the timing to launch next year bad considering sensitivity about the dollar and looming recession? The dollar is not such a huge issue. We have aggressive hedging. It is not nice for a German car manufacturer to see it going to $1.60 to the euro, but that will not affect our launch. I do not know the volume. We haven’t finalized pricing. The big picture we announced is that we hope to sell 20,000 Panameras worldwide and about 30 to 35 percent in the U.S. based on Porsche (total vehicle) sales levels. Have you used any incentives in the five years you have been here? No incentives. Does Porsche need to rethink that strategy? I do not think so. We’ve proved that this is the right way. The other ways build short-term sales and problems. It is totally wrong to incentivize. What is the current dealer return on sales? At one point you were at 2.5 percent? We are currently at 2.8 percent, and that is moving in an even better direction. We did a lot of consulting work at dealerships to improve internal processes and cut costs. That is helping the profitability situation. What is your proudest accomplishment at Porsche? The proudest accomplishment is not the numbers. Where I feel extremely satisfied is how many dealers embraced the direction of Porsche and believed in us and invested a lot of money in new facilities without support on our side. Do you have investment figures? In the last 36 months, they’ve invested $300 million. Give us an update on the move to exclusive or upgraded facilities. We are selling 78 percent of our volume through Porsche corporate identity stores. Five years ago, this number was 35 percent. Are you at a satisfactory dealer level now? We added 12 dealers 1.5 years ago and have kept it stable at 200 dealers in the U.S. Do luxury makers have to operate differently in the United States? What most luxury brands have to learn is the buying process is much different than in Europe. Most people (in Europe) choose a luxury brand, specify a car and wait three to four months. Here you look around a (dealership) lot and want to take (a vehicle) home. 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Table of Contents Feed for the Digital Edition of Automotive News - April 14, 2008

Dealership jobs hit 8-year low GM is the wild card in axle war Service contracts: Hard-sell tactics plague dealers, customers TV auto ads shift to online, mobile venues At seminar, marketing execs to discuss new ways to reach customers Better get to know the Nano — it's set to change the world Veteran Detroit 3 dealer: 'The future is quite bleak' Poll: Dealers scrounge for cuts Locals closer to GM strike Scion xB price rises $100 Valeo CEO: No breakup Tata Nano changes low-cost development Hyundai tailors TV, Web ads for Hispanics Study: Ads focused on vehicle qualities won on Oscar night Post-Celine, Chrysler ad guru seeks right note Chrysler's quest for quality lured Nissan exec Betts Search starts for in-vehicle alcohol detectors After S. Calif. success, Honda may fund ad groups Computer images gain ground in TV ads Web TV offers automakers new ad, sales options BMW: X6 will bring brand new buyers Diana T. Kurylko Chrysler fields 'dream' ads Nissan seeks dealerships for trucks Honda will export Alabama-built Pilots to Russia Toyota, Subaru work on 'affordable' sports car Cadillac's ad agency savors the sweet life Some stores may not sell Chrysler hybrids GM hybrids get off to a slow start in first quarter Lexus adds a personal touch to pamper owners, prospects What they're buying — and what they're not The age of fuel innovation is here Approaches to r&d vary Nano brings credibility to Indian engineering Honda must revisit online dealer sales of service pacts Chrysler got it right Mandates, markets and buyer demand For Detroit, some things never change Buick: As Chicago goes, so goes the nation Auto industry has lost a good man Accentuate the positive Ex-Porsche CEO: Cayenne spiced up sales Green programs shape battle for engineering grads Tata rewards suppliers with ties to India Bill aims to set minimum sound levels for vehicles Industry lobbyists step up emissions fight Seeking wider market, Nissan equips sports car for snow New chief of SAE has D.C. skills China and GM's answer to Nano — sort of $2,500 car is Ratan Tata's personal quest NADA offers training in risky credit Donna Harris Deal's goal: Widen appeal of dent-repair coverage Title committee created Vehicle loan delinquencies rise from 2007 Suppliers to the 2009 Tata Nano Odd China combo: Fuel sippers, SUVs Pontiac Vibe: A sporty hauler with Toyota touches Dealers J.D. Power III named tracking company partner Toyota will buy back rusted Tacomas 100,000 Flex sales a year? Farley: 'Absolutely' Ford wants word-of-mouth campaign Small suppliers feel the pain of axle strike Plastech tries to sell 2 units TRW plant will build Ford gears Toyota plans 2nd India plant Dodge launch goes digital Toyota, GM recall 660,000 vehicles for window flaws Lear announces white-collar layoffs March output drops 23.6% New Ford ads tout quality improvements Tata dealers must be handy with a wrench Can the Greens slow down the autobahn? Racy scandal for race exec Echoes from the grave: Olds still has cachet The Final Say

Automotive News - April 14, 2008

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